The London Metal Exchange has approved Hong Kong as an LME delivery point and the listing will
become active three months after the first warehouse company has been approved, it said on Monday.
“The metals approved for delivery in Hong Kong SAR are aluminium alloy, copper, lead, nickel, primary aluminium, tin, and zinc,” the LME said.
Companies seeking approval to operate a warehouse in Hong Kong must show that they have access to the required experience needed to run a warehouse in accordance with the LME procedures, it said.
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu welcomed the decision, saying that this will provide the most convenient, more cost-effective and safer delivery channels for related metals trading in the region.
“It will also increase the demand for Hong Kong’s trade, shipping, warehousing and transportation industries, strengthen Hong Kong’s commodities ecosystem, and lay a foundation for future financial-related trading”, Hui said.
“I look forward to seeing an approved warehouse commencing operations in Hong Kong soon.”
Approving warehouses in China, the world’s largest consumer of industrial metals, to store metal traded on the LME has been a strategic goal since Hong Kong Exchanges and Clearing (0388) bought the LME in 2012 for US$2.2 billion (HK$17.16 billion)
Expansion could mean a boost to LME trading volumes, but industry sources said international warehouse firms worried about the exorbitant costs of storage in Hong Kong are unlikely to rush to list warehouses in the territory.
Currently the LME has 465 approved warehouses in 32 locations across the United States, Europe and Asia storing metals such as aluminium, copper, zinc, lead, tin and nickel.
(Reuters and staff reporter)
